Opinion of the European Central Bank of 13 December 2016 on the auditing of Banka Slovenije’s business operations (CON/2016/59)
Date: 2016-12-13
Institutions: European Central Bank
Subjects: Slovenia, account, auditing, central bank, national law, supervisory body

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 13 December 2016 

on the auditing of Banka Slovenije’s business operations 

(CON/2016/59) 

Introduction and legal basis 

On 11 November 2016 the European Central Bank (ECB) received a request from the Slovenian Ministry 

of Finance for an opinion on a draft law amending the Law on Banka Slovenije (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC1, as 

the draft law relates to Banka Slovenije. In accordance with the first sentence of Article 17.5 of the Rules 

of Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  Banka Slovenije is currently subject to an audit of its financial accounts pursuant to Article 27.1 of 

the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central  Bank 

(hereinafter  the  ‘Statute  of  the  ESCB’).  The  purpose  of  the  draft  law  is  to  establish  rules  for  the 
auditing  of  Banka  Slovenije’s  operations  by  the  national  Court  of  Audit2  in  a  manner  compatible 
with the principle of central bank independence3. 

1.2  Pursuant  to  the  draft  law,  the  Court  of  Audit  must  audit  the  regularity  and  ‘efficiency’  of  Banka 

Slovenije’s business operations. However, a footnote to the text of the draft law indicates that, as 

part  of  the  preparatory  legislative  process,  the  Court  of  Audit  has  proposed  that,  under  the  draft 

law, the Court of Audit must audit the regularity and ‘performance’ and not the efficiency of Banka 

Slovenije’s business operations. The Law on the Court of Audit defines the concepts of ‘regularity’, 
‘efficiency’  and  ‘performance’  audits4.  Pursuant  to  Article  20(3)  of  the  Law  on  the  Court  of  Audit, 

(i) a  ‘regularity  audit’  means  obtaining  relevant  and  sufficient  data  to  enable  an  opinion  to  be 

expressed  on  the  compliance  of  an  operation  with  regulations  and  guidelines  that  any  user  of 

public  funds  is  required  to  observe  in  the  conduct  of  an  operation  and  (ii)  a  ‘performance  audit’ 

1  

2  

3  

4  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
Pursuant to Article 1 of the Law on the Court of Audit, the Court is the supreme audit institution for the supervision of 
state accounts, the state budget and all public spending in Slovenia. In relation to other state authorities, the Court of 
Audit is an autonomous and independent authority. 

The  draft  law  provides  for  the  introduction  of  these  rules  by  adding  a  new  article  to  the  Law  on  Banka  Slovenije. 
Zakon o Banki Slovenije (ZBS-1) (Ur. l. RS No 72/06 – official consolidated text, and 59/11). 
See  paragraph  4.2  of  Opinion  CON/2015/57  and  paragraph  2.2  of  Opinion  CON/2016/24.  All  ECB  Opinions  are 
published on the ECB’s website at www.ecb.europa.eu. 

 
 
 
 
 
                                                 
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means obtaining relevant and sufficient data to enable an opinion to be expressed on the economy, 
efficiency  and  effectiveness  of  a  business  operation5.  Hence,  an  ‘efficiency  audit’  is  one  of  the 
three types of audit that are categorised as performance audits6. 

1.3  The draft law expressly excludes from the scope of audit any actions that constitute decisions on 

the  implementation  of  monetary  policy,  in  accordance  with  the  rules  established  by  the  decision-

making bodies of the ECB.  

1.4  The draft law further provides that in the auditing of supervisory duties the audit does not cover the 

application  and  interpretation  of  supervisory  law  and  practices  carried  out  by  Banka  Slovenije  on 

the basis of the Law on Banka Slovenije or other provisions and within the framework of the single 
supervisory mechanism (SSM) on the basis of Council Regulation (EU) No 1024/20137. However, 

a footnote to the text of the draft law indicates that, as part of the preparatory legislative process, 

the  Court  of  Audit  has  proposed  that  the  reference  to  the  Law  on  Banka  Slovenije  and  other 

provisions should be deleted from this carve-out, with the result that the carve-out would only cover 

the application and interpretation of supervisory law and practices carried out by Banka Slovenije 

on  the  basis  of  Regulation  (EU)  No  1024/2013.  In  addition,  the  draft  law  provides  that  in  the 

auditing of supervisory duties the audit does not interfere with or include the competences of Banka 

Slovenije,  which  Banka  Slovenije  exercises  as  part  of  the  European  System  of  Central  Banks 

(ESCB), or the Eurosystem, or as a member of the European System of Financial Supervision, as 

part  of  the  activities  of  the  European  Banking  Authority,  the  European  Systemic  Risk Board,  and 

the  Single  Resolution  Mechanism.  Moreover,  the  draft  law  provides  that  in  the  auditing  of 

supervisory  duties  the  audit  is  not  so  broad  as  to  result  in  an  indirect  audit  of  the  ECB,  other 

members of the ESCB, or the Eurosystem.  

1.5  The draft law provides that, notwithstanding the provisions of the Law on the Court of Audit, Banka 

Slovenije  is  not  obliged  to  submit  to  the  Court  of  Audit  reports  concerning  the  elimination  of 

irregularities  and  inexpediencies  identified.  The  draft  law  further  specifies  that  Banka  Slovenije 

must  explain  any  deviation  from  the  recommendations  or  requirements  proposed  by  the  Court  of 

Audit in its audit report. However, the text of the draft law places the reference to ‘requirements’ in 

square  brackets  and  a  footnote  indicates  that  the  inclusion  of  this  term  is  on  the  proposal  of  the 

Court of Audit. 

1.6  The draft law provides that confidential information, within the meaning of Article 37 of the Statute 

of  the  ESCB,  may  be  obtained  by  the  Court  of  Audit  in  accordance  with  the  rules  governing  the 

operations of the ESCB.  It provides  further that other confidential information, including  statistical 

and supervisory data, whose exchange is regulated by Union rules, may be obtained by the Court 

of Audit in accordance with these rules. The draft law also lays down that the auditors and officers 

of the Court of Audit and other persons who are in any legal relationship whatsoever with the Court 

of Audit must keep confidential all information  which they learn when  auditing Banka Slovenije. If 

information  is  requested  from  the  Court  of  Audit  pursuant  to  public  access  legislation,  the  Court 

5  
6  
7  

See Article 20(3) of the Law on the Court of Audit.  

See paragraph 2.2 of Opinion CON/2016/24. 
Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 5). 

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may  only  disclose  information  of  that  kind  under  the  conditions  governing  the  disclosure  of 

information applicable to Banka Slovenije. 

1.7  The  draft  law  clarifies  that,  notwithstanding  the  provisions  of  the  Law  on  the  Court  of  Audit,  the 

Court  of  Audit  has  no  powers  to  propose  the  dismissal  of  members  of  the  Governing  Board  of 

Banka  Slovenije.  Furthermore,  the  draft  law  requires  the  Court  of  Audit,  when  exercising  its 

auditing  powers,  not  to  interfere  in  the  activities  of  independent  external  auditors  appointed  in 

accordance with Article 52 of the Law on Banka Slovenije. 

2. 

Observations 

2.1  The ECB notes that it has been consulted by the Slovenian authorities on draft legislation relating 

to the auditing of Banka Slovenije’s operations by the Court of Audit on three occasions in recent 
years8. It is understood that the previous legislative initiatives were not adopted, and that the draft 

law is the product of further consultations and changes. The draft law takes into consideration, inter 

alia,  the  concerns  raised  by  the  ECB  in  particular  as  regards  the  protection  of  central  bank 

independence. The ECB notes that some of the provisions of the draft law respond to the previous 

opinions  of  the  ECB,  in  particular  ECB  Opinion  CON/2016/24.  The  ECB  reiterates  the  views 

expressed in Opinion CON/2016/24 and has the following additional comments to make in relation 

to the draft law.  

2.2  The  ECB  observes  that,  in  principle,  a  state  audit  office  or  similar  body  that  controls  the  use  of 

public  finances,  such  as  the  Court  of  Audit,  may  undertake  an  audit  in  respect  of  an  NCB’s 

activities the activities  and use of public finances. However, any  state audit office or similar body 

entrusted with such competences must be subject to a number of safeguards designed to ensure 

compliance with the principle of central bank independence: (a) the scope of the control should be 

clearly defined by the legal framework; (b) the activities of the NCB’s independent external auditors 

should not be prejudiced; (c) in line with the principle of institutional independence, as enshrined in 

Article 130 of the Treaty and Article 7 of the Statute of the ESCB, the audit should: (i) comply with 

the  prohibition  on  giving  instructions  to  an  NCB  and  its  decision-making  bodies,  (ii)  not  interfere 

with  the  NCB’s  ESCB-related  tasks,  and  (iii)  be  carried  out  on  a  non-political,  independent  and 
purely professional basis9.  

2.3 

The  ECB  notes  that  the  draft  law  excludes  from  the  scope  of  audit  any  actions  representing  the 

definition  and  implementation  of  monetary  policy  in  accordance  with  rules  set  by  the  decision-

making bodies of the ECB.  

2.4 

It is not clear whether it is the intention of the draft law also to specify that the Court of Audit’s audit 

may  not  interfere  with  or  include  Banka  Slovenije’s  competences  as  part  of  the  ESCB  or  the 

Eurosystem.  The  relevant  provision  introducing  this  carve-out  is  linked  to  the  auditing  of 

supervisory  duties  only.  However,  the  carve-out  should  cover  Banka  Slovenije’s  competences  as 

part of the ESCB or the Eurosystem. Namely, if the legislative intention is not to establish a carve-

out  from  the  Court  of  Audit’s  audit  in  respect  of  Banka  Slovenije’s  competences  as  part  of  the 

8  
9  

See Opinions CON/2015/8, CON/2015/57 and CON/2016/24.  
See paragraph 4.4 of Opinion CON/2015/8, paragraph 4.2 of Opinion CON/2015/57 and paragraph 2.1 of Opinion 
CON/2016/24; see also ECB Convergence Report June 2016, pp. 26-27. 

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ESCB  or  the  Eurosystem,  except  with  regard  to  the  definition  and  implementation  of  monetary 

policy, this would breach the requirements of central bank independence under Article 130 of the 

Treaty and Article 7 of the Statute of the ESCB. As noted in paragraph 2.2 above, and in the ECB’s 

previous opinions, central bank independence requires that the audit may not interfere with Banka 
Slovenije’s ESCB-related tasks10. 

2.5 

The ECB recognises the consideration given in the draft law to the principle of independence set 

out in Article 19 of Regulation (EU) No 1024/2013, according to  which, the ECB and the national 

competent authorities when acting within the SSM must act independently and the governments of 

the Member States and any other bodies must respect that independence, and the respect shown 

for the limitations provided in Article 27.2 of the Statute of the ESCB and Article 20(7) of Regulation 

(EU) No 1024/2013 with regard to the supervisory tasks conferred on the ECB by that Regulation. 

The  ECB  notes  that  the  audit  carried  out  by  the  Court  of  Audit  on  Banka  Slovenije’s  supervisory 

activities should (a) not extend to the application and interpretation of supervisory law and practices 

in the context of the SSM; (b) not interfere with and not include the tasks conferred on the ECB by 

Regulation  (EU)  No  1024/2013,  and  (c)  not  extend  to  result  in  an  indirect  audit  of  the  ECB.  As 

already noted by the ECB, the audit should also be carried out on a non-political, independent and 
purely professional basis11. The ECB understands that the audit should also not extend as to result 

in  an  indirect  audit  of  the  ECB,  other  members  of  the  ESCB,  or  the  Eurosystem.  However,  the 

current  wording  of  the  draft  law  could  be  drafted  more  clearly  so  as  to  expressly  clarify  that  the 

audit shall not entail indirect auditing of the ECB, other members of the ESCB, or the Eurosystem. 

2.6 

The ECB acknowledges the express provision in the draft law indicating that Banka Slovenije is not 

required  to  submit  reports  to  the  Court  of  Audit  concerning  the  elimination  of  irregularities  and 

inexpediencies identified, but must explain any deviation from its recommendations. As stated in an 

earlier  Opinion,  the  ECB  understands  that  by  referring  only  to  recommendations  of  the  Court  of 

Audit and to the ‘comply or explain’ principle, the draft law would ensure that Banka Slovenije is not 

bound  by  the  opinion  of  the  Court  of  Audit  and  therefore  the  Court  of  Audit  may  not  give 
instructions  to  Banka  Slovenije12.  However,  any  references  in  the  draft  law  to  ‘requirements’  in 

addition to recommendations of the Court of Audit would not comply with the prohibition on giving 

instructions to Banka Slovenije and its Governing Board.  

2.7 

The  ECB  notes  that  the  draft  law’s  provisions  on  the  Court  of  Audit’s  access  to  confidential 

information make reference both to Article 37 of the Statute of the ESCB and to applicable Union 

laws,  including  those  governing  the  exchange  of  statistical  and  supervisory  information.  These 
provisions are beneficial from the perspective of legal certainty13. However, insofar as it is intended 

to establish carve-outs under the draft law from the ambit of the Court’s audit in respect of Banka 

Slovenije’s  competences  as  part  of  the  ESCB,  the  Eurosystem  and  the  SSM  and  to  ensure  the 

safeguards  mentioned  above,  it  is  difficult  to  imagine  types  of  confidential  information  within  the 

10 

11  
12  
13  

Pursuant to Article 2 of the Law on Banka Slovenije, the principle of central bank independence should be respected 
not only when Banka Slovenije performs ESCB-related tasks, but also when it performs national tasks. See footnote 
6 of the Opinion CON/2016/24, footnote 19 of the Opinion CON/2015/8 and footnote 7 of the Opinion CON/2014/25. 

See paragraph 2.2 of Opinion CON/2016/24 and paragraph 4.3 of Opinion CON/2015/57. 
See paragraph 2.2 of Opinion CON/2016/24. 

See paragraph 2.3 of Opinion CON/2016/24. 

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meaning of Article 37 of the Statute of the ESCB and other statistical and supervisory data whose 

exchange is regulated by Article 27 of Regulation (EU) No 1024/2013 and other Union law to which 
the Court could have access14. 

2.8 

Finally,  in  case  this  draft  law  undergoes  substantial  amendments  of  a  non-technical  nature 

compared with the version received and opined on herein, the ECB should be consulted in relation 
to those amendments15. 

This opinion will be published on the ECB’s website.  

Done at Frankfurt am Main, 13 December 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

14  
15  

See paragraph 3.1.6 of Opinion CON/2016/52. 
See  the  Guide  to  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative 
provisions, dated October 2015. The Guide is available on the ECB’s website at www.ecb.europa.eu. 

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